The unemployment benefits system is a lifeline for those who have lost jobs through no fault of their own and need help before they can find another position.
This federal unemployment program is administered by the states, and the rules differ, depending on where you live. However, there are some basic guidelines for how to file for unemployment no matter what state you’re in.
Here’s what you need to know about filing for unemployment.
What Is Unemployment?
Unemployment insurance is meant to assist a specific group of people that lost their jobs by temporarily replacing a portion of their wages. You must meet specific eligibility requirements to collect unemployment. Collecting unemployment benefits could help you survive a layoff.
While unemployment requirements vary by state, generally, you need to have lost your job through no fault of your own and worked a certain amount of time or earned a specific amount of income. Some states have additional requirements. Be sure to check with your state’s unemployment office.
Recommended: 7 Ways to Tackle Financial Stress
Filing for Unemployment
The first question to ask is if you’re eligible for benefits in the first place.
Typically, to be eligible for unemployment you need to have worked a salaried job for an employer. Employers pay federal unemployment tax to fund the unemployment account of the federal government. Businesses also may have to pay state unemployment taxes.
By working a set amount of time — it varies from state to state — for an employer that pays that tax, you become eligible to receive unemployment benefits.
The first part of eligibility relates to how you work. The second part relates to how you stop working.
Unemployment is designed to assist those who are no longer working “through no fault of (their) own,” according to the Department of Labor. While each state’s exact rules are different, the general guideline is that you are only eligible for unemployment if you’ve lost your job for economic reasons on the part of your employer as opposed to having been terminated for cause or having left voluntarily.
If you meet the two conditions, you can usually then apply for unemployment benefits from your state. You can use these funds to pay your bills during a job loss.
There are some basic commonalities among the states: You will need to provide your address, phone number, address of your former employer, Social Security number, and the dates that you were employed by your former employer.
How Much Will You Receive?
It varies by state, but the average maximum benefit amount in the third quarter of 2022 was $392 a week, according to the Center on Budget and Policy Priorities. Your unemployment benefit is based on your former wages, with higher-wage workers typically getting more benefits, up to a cap.
The amount you get varies by state and it ranges widely. Having an emergency fund can help tide you over until you find a new job.
This is also a good time to create a budget so that you can carefully track your spending and savings.
Which Kind of Benefits Are You Eligible For?
If you receive a Form W-2 and lose your job through a layoff, you will typically be eligible for unemployment Insurance.
If you’re self-employed or an independent contractor, you generally can’t receive unemployment because you haven’t paid into the unemployment fund. However, it may depend on the specific law in your state. Check with your state’s unemployment office to find out if you may be covered.
Recommended: How to Manage Your Money as a Freelancer
When to Apply
Apply as soon as possible. It can take weeks for claims to be approved, so apply right after you lose your job, if possible. You can apply through your state’s unemployment office.
How to Apply
This varies state by state, and you should check on your state’s procedures. You can typically apply online or over the phone.
How Long Does It Take to Receive Benefits?
The Department of Labor says it typically takes “two to three weeks” to receive benefits, but it can take longer.
You will receive benefits for the full amount of time from when you successfully applied (in some states there’s a one-week waiting period), not just from when you started receiving benefits.
How Will You Receive Benefits?
Once again, there are variations among states about the form in which your unemployment benefits are received.
Some states offer direct deposit, meaning you can receive your unemployment benefits as you would your paycheck, directly into your bank account.
Others disburse benefits through a debit card mailed by the state.
One benefit of using a debit card is that an unemployment recipient does not need a bank account in order to access benefits. While this is convenient for those without bank accounts, there are some downsides, like limits on ATMs that can be used without fees, and the general limitation on which merchants accept debit cards.
Using a debit card also puts you at the mercy of the mail before you can start using benefits. If you were getting paid from your job via direct deposit, you will likely receive your benefits faster.
You may want to consider opening a bank account, if you don’t have one, to get your unemployment faster and easier via direct deposit.
How Can You Remain Eligible for Benefits?
Again, this varies by state, but generally you need to have a record of seeking work to remain eligible for unemployment benefits. States may have some kind of form or portal that you’re required to fill out or log into to show that you are looking for work.
Recommended: How to Handle Student Loans During a Job Loss
How Long Do Benefits Last?
Unemployment benefits last 26 weeks in most states. However, several states provide fewer weeks of benefits, and two states (Massachusetts and Montana) currently offer a bit more.
If you lose your job through no fault of your own, unemployment insurance can cover some of your lost wages as long as you meet the eligibility requirements. File for unemployment with your state unemployment office as soon as you can, since it can take several weeks to receive benefits.
You may obtain your benefits faster through direct deposit. With a SoFi Checking and Savings account, your unemployment funds can be deposited directly into your account. You’ll also earn a competitive APY, which can help your money grow, and you’ll pay no account fees. Nor is there a minimum balance to meet.
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit activity can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
SoFi members with Qualifying Deposits can earn 4.50% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.50% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 8/9/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet..
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.